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Pebblebrook Hotel Trust PEB

Morningstar Rating
$13.68 0.00 (0.00%)
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Company Report

Most REITs in the US Are Trading at Significant Discounts to Fair Value

The US REIT sector remains significantly undervalued, in our perspective. While the pandemic hurt REIT valuations in 2020, the recovery of fundamentals across most sectors combined with low interest rates led to strong total returns in 2021 and early 2022. However, despite fundamentals continuing to perform well over the past two years, with many REITs reaching historical levels of net operating income growth, the sector has underperformed the broader equity markets over the past two years. We believe that the cause has been the sector’s negative correlation with interest rates as income-oriented investors rotate out of the sector, higher rates lower the value REITs can create with external growth, and property valuations fall in line with higher rates. However, we don’t believe that higher rates significantly change our fair value estimates for the sector. Additionally, interest rates are down from the October 2023 highs, and REIT share prices have generally inversely followed the movements of the US 10-year Treasury.

Price vs Fair Value

PEB is trading within a range we consider fairly valued.
Price
$13.69
Fair Value
$16.20
Uncertainty
High
1-Star Price
$81.99
5-Star Price
$67.80
Economic Moat
Cnmqc
Capital Allocation
Fqptyrws

Bulls Say, Bears Say

Bulls

Potentially accelerating economic growth may prolong a robust hotel cycle and benefit Pebblebrook's portfolio and performance.

Bears

Significant new supply throughout several of Pebblebrook’s core markets and rising interest rates will pressure the firm’s performance and valuation.

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News

Trading Information

Previous Close Price
$13.68
Day Range
$13.5313.80
52-Week Range
$11.4016.65
Bid/Ask
$13.66 / $13.67
Market Cap
$1.65 Bil
Volume/Avg
438,329 / 1.5 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
1.15
Dividend Yield (Trailing)
0.29%
Dividend Yield (Forward)
0.29%
Total Yield
3.74%

Company Profile

Pebblebrook Hotel Trust currently owns upper upscale and luxury hotels with 11,924 rooms across 46 hotels in the United States. Pebblebrook acquired LaSalle Hotel Properties, which owned 10,451 rooms across 41 US hotels, in November 2018, though management has sold many of those hotels over the past few years. Pebblebrook's portfolio consists mostly of independent hotels with no brand affiliations, though the combined company does own and operate some hotels under Marriott, Starwood, InterContinental, Hilton, and Hyatt brands.
Sector
Real Estate
Industry
REIT - Hotel & Motel
Stock Style Box
Small Value
Total Number of Employees
58

Competitors

Valuation

Metric
PEB
HST
PK
Price/Earnings (Normalized)
18.4253.54
Price/Book Value
0.601.880.82
Price/Sales
1.152.371.16
Price/Cash Flow
6.628.267.89
Price/Earnings
PEB
HST
PK

Financial Strength

Metric
PEB
HST
PK
Quick Ratio
0.281.012.97
Current Ratio
0.301.163.19
Interest Coverage
0.244.651.41
Quick Ratio
PEB
HST
PK

Profitability

Metric
PEB
HST
PK
Return on Assets (Normalized)
0.64%5.38%2.63%
Return on Equity (Normalized)
1.34%9.72%6.18%
Return on Invested Capital (Normalized)
2.18%6.49%4.75%
Return on Assets
PEB
HST
PK
See how this stock stacks up to its competitors with Morningstar Investor

REIT - Hotel & Motel Industry Comparables

1-Day Chart
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Morningstar Rating for Stocks
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Economic Moat
Market Cap
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